Don Cayo: The NHL lockout was good for Vancouver’s economy

Rogers Arena has been rather deserted as of late, but that will change with the start of a shortened NHL season. Columnist Don Cayo argues that most pro sports franchises are a drag, not a boost, on the local economy.

Photograph by: DARRYL DYCK
, THE CANADIAN PRESS

No doubt the pain was real for downtown bar owners and staff, or for sports memorabilia sellers and the like, and their relief at the end of the NHL lockout is warranted.

But when the numbers for Metro Vancouver’s overall economic performance for the lost half of the Vancouver Canucks hockey season are eventually tallied, an honest analysis is likely to conclude the lockout’s impact was either negligible, non-existent or — most likely of all — slightly positive.

Because that’s what thorough analyses have shown to be the case time after time — professional sports franchises tend not to boost a local or regional economy, but rather to drag it down a bit.

Brad Humphreys of the University of Alberta in Edmonton was a pioneer in this kind of research, as co-author of a widely cited study in 2000 that looked at U.S. cities hit by work stoppages in pro sports. The findings, he tells me, hold true on both sides of the border.

Even though the study is a few years old, “I don’t think we’d find anything different now,” he said. “I don’t see anything in today’s economy that would change it.”

The study looked at employment earnings for employees in four different types of occupations, and found their collective earnings rose slightly when their cities’ professional sports teams were idle. Other researchers have since looked at other indicators — for example, changes in the sale of taxable goods or the occupancy rate in hotels during work stoppages — and they’ve reached similar conclusions.

The reason is, when you think about it, pretty obvious. When people can’t spend their money on pricey sports tickets, they spend it on other stuff instead.

Humphreys concedes this is difficult to observe on the ground — economic losses as a result of games not played are concentrated in one or two parts of the city, while the replacement spending is spread broadly among neighbourhoods and is used to buy a wide variety of goods and services.

Given that the overall economic impact is also quite small, the economic boost or hit to the majority of non-sports-related businesses will be scarcely noticeable.

“So you’re not likely to find business people to interview who’ll tell you they’ve been doing better during a work stoppage. Yet if people have an entertainment budget, they’re going to spend it.”

Humphreys also suspects money spent on myriad other things when professional sports teams aren’t playing gets spread around the community much more quickly than cash used to buy tickets.

Sports franchises may involve big bucks, but they’re actually fairly small businesses in terms of the people they employ. A few of these employees are astounding well-paid, but most aren’t.

The upshot is that the considerable sums spent on professional sports tickets wind up in rather few pockets and purses. And a hefty percentage of that money goes to millionaire players and billionaire owners, who aren’t nearly as likely as the rest of us to rush out and spend it right away.

“If you tip a waitress,” Humphreys said when we talked on Tuesday, “that money is likely to be circulated in the economy much sooner than if you put it into the pocket of someone who is already fantastically rich.

“For one thing, if that money goes to a hockey player’s salary, if he has any brains at all he’ll be saving a good portion of it.”

So, to any hockey fans who may be reading this column, I say enjoy the game when the players finally get back on the ice. But please understand that — like most good entertainment — it’ll come at a cost.

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Rogers Arena has been rather deserted as of late, but that will change with the start of a shortened NHL season. Columnist Don Cayo argues that most pro sports franchises are a drag, not a boost, on the local economy.

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